Director of Public Prosecutions v Alexander Surin

On an application for summary judgment in civil recovery proceedings, the claimant must show that the defendant has no real prospect of defending the claim and that no compelling reason requires a trial. The court may assess the credibility of an asserted innocent explanation against the whole evidential picture. It may draw common-sense inferences from suspicious transaction patterns, unexplained dealings, prolonged inaction and the absence of expected business records, without reversing the burden of proof. Cryptocurrency is property for the purposes of the Proceeds of Crime Act 2002. Where property is shown on a good arguable case to derive from unlawful conduct, and the defence lacks conviction, summary judgment and a recovery order may follow.

The Director of Public Prosecutions brought a Part 8 claim under the Proceeds of Crime Act 2002 for recovery of 78.22545 Bitcoin held in an account operated by Coinbase and owned by the defendant. A property freezing order had been made, followed by a civil recovery investigation and production order.

The claimant alleged that the Bitcoin derived from drug trafficking and money laundering, relying in particular on transfers from a wallet associated with a convicted drug trafficker and on the subsequent transaction history. The defendant said that the Bitcoin represented legitimate payments for gold bullion, watches and other luxury goods. The central issues were whether the property was recoverable and whether the defendant had a real prospect of defending the claim at trial.

1. Summary judgment and admissibility. The defendant could rely on evidence served in response to the summary judgment application under CPR 24.5(3), because the earlier directions concerned evidence in the Part 8 claim and did not vary the timetable for summary judgment evidence.
2. Recoverable property. Cryptocurrency falls within the statutory definition of property in section 316 of the Proceeds of Crime Act 2002. The claimant established a good arguable case that two transfers into the defendant’s account derived from a drug-supply conspiracy. The surrounding transaction history supported an inference that the account was used to launder criminal proceeds.
3. Inferences and the burden of proof. The claimant retained the burden of proving that the property was recoverable. Nevertheless, the court could assess the defendant’s explanation against the totality of the evidence and draw common-sense inferences from the account’s accumulation and dispersal pattern, the unexplained recipients, the defendant’s prolonged failure to challenge the freezing order, and the absence of expected business records.
4. Credibility of the defence. The defendant’s general account of international trading did not explain the substantial incoming transactions. Only two invoices were produced, their metadata materially undermined their asserted provenance, and the evidence of the supporting witness contained significant inconsistencies and lacked documentary support. The innocent explanation therefore had no realistic prospect of acceptance at trial.
5. Statutory requirements and disposal. The United Kingdom connection and dual-criminality requirements were satisfied. The defendant had no real prospect of defending the claim and there was no other compelling reason for a trial. The defendant’s strike-out application was dismissed. The claimant was granted summary judgment and the Bitcoin was ordered to vest in the trustee for civil recovery under section 266(1) and (2) of the Proceeds of Crime Act 2002.